Back in March, Microsoft announced that it had canceled the upcoming Fable Legends game and would be shuttering Lionhead Studios, the long-running studio responsible for the Fable franchise. Now, it's claimed that Lionhead could have been saved from closure by one of several potential buyers, but the companies backed out when Microsoft refused to let go of the Fable IP.

According to a report from Kotaku UK, “some of the biggest names in video game publishing” expressed interest in acquiring Lionhead during the studio’s consultation period, which, under UK law, is the set amount of time when a company must explore other options before closing down.

While the report doesn’t specifically state who the interested parties were, it does say that letters of intent had been filed, signaling just how serious they were about purchasing the studio.

The problem allegedly lay with Microsoft’s refusal to sell the Fable IP along with Lionhead. "90% of the people interested just walked away at that point," claims one source close to Xbox. Despite recent entries in the series failing to capture its former glories, owning the Fable name would have been an enticing proposition for publishers.

As Kotaku UK notes, the refusal to sell the IP would mean that any publisher buying Lionhead would have to enter into a licensing agreement with Microsoft in order for the studio to make a new Fable game - a deal that would likely eat up a significant percentage of the title’s revenue.

If the source’s information is accurate, then perhaps the 20-year-old Lionhead would still be open, if only Microsoft had allowed a competitor to buy the Fable brand.

If the source’s information is accurate, then perhaps the 20-year-old Lionhead would still be open, if only Microsoft had allowed a competitor to buy the Fable brand.

Lionhead is expendible; the Fable IP is not. This is why the issue was an impasse for the negotiating parties. If MS had let go of the IP, Lionhead might still be around but the long-term revenue (for Microsoft) from Fable would have been lost to the other parties.

So how exactly was it beneficial to Microsoft to close down Lionhead and cancel Fable altogether, as opposed to selling it all to a willing buyer?

Click to expand...

It's very simple.

Lionhead was an expense (thus its closure). The Fable IP has the ability to generate long-term profits for whoever controls it. If they had sold Lionhead and the Fable IP, they would have made a sizeable short-term profit. However, someone else would be making money off of Fable for years or decades to come.

Remember, there are plenty of competent development studios out there. Low risk/high return IPs are a much more difficult to come by.

If the sourceâ€™s information is accurate, then perhaps the 20-year-old Lionhead would still be open, if only Microsoft had allowed a competitor to buy the Fable brand.

Lionhead is expendible; the Fable IP is not. This is why the issue was an impasse for the negotiating parties. If MS had let go of the IP, Lionhead might still be around but the long-term revenue (for Microsoft) from Fable would have been lost to the other parties.

This deal was never about Lionhead. It was always about Fable.

Click to expand...

I think that at this point the fable franchise isn't worth very much anyways.